Two large employer associations unite interests in merger

In May 2006, two large Bulgarian employer organisations merged to form the Confederation of Employers and Industrialists in Bulgaria. At the same time, another two associations have signed a partnership treaty. This brings to an end a 15-year period of fragmentation among representative employer organisations.

At the start of Bulgaria’s economic transition in 1989–1990, employers’ interests were represented by two organisations. However, by 2004, six employer organisations were found to meet the representativeness criteria of the Labour Code, namely the:

  • Bulgarian Industrial Association (BIA), with 2,481 members;
  • Bulgarian Chamber of Commerce and Industry (BCCI) – 2,262 members;
  • Bulgarian Union of Private Entrepreneurs (Vuzrazdane) – 873 members;
  • Union for Economic Initiative – 660 members;
  • Employers Association of Bulgaria (EABG) – 828 members;
  • Bulgarian Industrial Capital Association (BICA) – 862 members.

Further organisations were also present, such as the Bulgarian International Business Association (BIBA).

Thus, it was difficult to reach a consolidated employers’ view on important economic and social issues. Furthermore, the practice of the same employer being a member of several employer organisations became more problematic, with varying views emerging in different associations, as well as distorting the representative landscape.

Merger of EABG and BIBA

At the beginning of May 2006, EABG and BIBA merged after holding their annual general meetings in parallel. The new organisation is called the Confederation of Employers and Industrialists in Bulgaria – The Voice of Bulgarian Business (CEIBG).

The new employer organisation unites large and medium-sized entrepreneurs, covering more than 400,000 workers, producing two thirds of the national gross domestic product (GDP) and forming three quarters of the country’s exports.

According to EABG management,

There were two roads ahead in the process of establishing an influential and irrefutable organisation representing Bulgarian business. A long road – trying to prove over time with our actions that we are better than the others – and a short road – uniting with our partners, saving time and energy and becoming useful for our members right away, even before the effective membership of Bulgaria in the EU.

The main conclusions of the general meeting of BIBA were:

The merger of the two organisations is a major step towards creating a new centre for representativeness in Bulgarian business. The union of the two elements – BIBA as representative of foreign business and EABG as representative of large Bulgarian business – creates a powerful instrument through which the voice of business may be heard in Europe. The new body will partner the government in attracting foreign investors.

The new employer organisation aims to become much more efficient in the process of improving the business climate in the country, improving the competitiveness of the Bulgarian economy and increasing the opportunities of its members to integrate into the common European market through the implementation of international good business practices. It will represent and protect the interests of business in terms of legislation and administration at national and local level, and also at EU level. For this purpose, the confederation will have at its disposal a larger expert and administrative capacity than either BIBA or EABG has had so far. The association will seek membership of the Union of Industrial and Employers’ Confederations of Europe (UNICE).

The fundamental principles of the new organisation will be transparency and accountability in decision making, as well as reliability and sustainability of management. In terms of governance, the board and the chair will have a mandate, and the same person may not hold the chair for more than four years (two mandates of two years).

Preliminary assessments indicate that CEIBG does not aim to become the representative organisation of the entire Bulgarian business community. Although the confederation will be open to companies of any size, it will be more likely to represent large businesses because of its relatively high membership fee.

Partnership between BIA and BICA

At the end of May 2006, two other employer organisations – BIA and BICA – signed a partnership treaty. This approach differs from the merger of BIBA and EABG, which led to the establishment of the new confederation, CEIBG.

BIA and BICA are of the opinion that they can better reach their common goals if they retain their legal independence. The two parties agreed that the treaty will be for an unlimited duration and the decisions will be made by consensus. The objective of the new partnership is to coordinate the views of the two organisations on issues such as industrial relations and the business environment. At national level, they will vote and make proposals on draft bills, and defend common views in negotiation processes with trade unions and in the Council for Economic Growth of the Bulgarian government.

BIA, as a member of UNICE, will also include members of BICA in UNICE’s working groups. In addition, the two unions plan to open a representative office in Brussels.

Commentary

The consolidation process mainly initiated by the large business organisations will probably lead to further partnerships or mergers of other employer associations representing small business interests. Bulgarian industrial relations development analysts believe that, in time, the employer organisations will unite in two conglomerates – of large and of small companies – similar to the practice in EU Member States.

Elina Skarby, Balkan Institute for Labour and Social Policy (BILSP)

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment